Plymouth property values rose by 0.6% last month, meaning
they are 3.4% higher than 12 months ago. Overall, I expect future property
price growth to remain firm, built on the foundations of an improving labour
market, strengthening economy and very low mortgage rates. In fact, talking to
a number of other agents in the city, mortgage arrangers and solicitors (all of
whom have their direct finger on the pulse of the Plymouth property market), the
steady long term growth in Plymouth property prices tied in by strong demand
conditions so far this summer, alongside an underlying lack of supply and the
continued low mortgage rate environment, means the slow but steady upward
momentum of the Plymouth property market is likely to continue in the second
half of 2015.
However, there are a couple points I wish to highlight as
all my blog readers will know, I like to give a balanced and honest opinion of
what is happening in the Plymouth property market. The two main points being low interest rates
and a lack of supply of property.
Interest rates
first - Mark Carney (Chief of the Bank of England) said in a speech a few
weeks ago at Lincoln Cathedral, the Bank will be seriously considering raising
interest rates around Christmas time. An upward movement in interest rates will
temper demand and result in a marked slowdown in house price growth. Mr Carney
said that only seven out of ten people that had a mortgage (57% to exact) had a
variable rate mortgage, compared with more than one in seven (73% to be exact)
in the Summer of 2012. Now I am not a mortgage arranger and cannot give advice,
but rates are only going on one direction, so whether you are a landlord or
homeowner, this might be a time to consider fixing your mortgage rate? Don’t say I didn’t warn you!
Tie this in with the stricter mortgage lending rules which were
introduced in 2014, which affected people’s ability to have larger mortgages,
this means homeowners will need to be realistic in their pricing if they want
to sell. Reading other recent reports though, property owners have continued to
pay off mortgages at a faster rate while mortgage rates have been low.
Therefore, when mortgage rates rise, the affect on home movers sentiment which,
given the shortage of supply, would result in a marked slowdown in the rate of
house price growth.
Shortage of Supply – As I have mentioned in previous articles, the number of houses on the market in Plymouth is at an all time low. One reason is the large number of buy to let landlords who have bought Plymouth property over the past fifteen years. Unlike first time buyers who tend to move on after a few years, landlords tend to keep their properties long term, meaning there are less properties coming onto the market ... thus restricting supply and sales. In fact over the last four months, only 1,081 properties in the Plymouth City Council area have changed hands and sold, compared to 1,266 in the same time frame in 2014, a not so insignificant drop of 14.61%.
If you are planning on investing in the Plymouth property
market, or just want to know more, things to consider for a successful buy to let
investment, one source of information is the Plymouth Property Blog
www.plymouthpropertyinsight.co.ukShortage of Supply – As I have mentioned in previous articles, the number of houses on the market in Plymouth is at an all time low. One reason is the large number of buy to let landlords who have bought Plymouth property over the past fifteen years. Unlike first time buyers who tend to move on after a few years, landlords tend to keep their properties long term, meaning there are less properties coming onto the market ... thus restricting supply and sales. In fact over the last four months, only 1,081 properties in the Plymouth City Council area have changed hands and sold, compared to 1,266 in the same time frame in 2014, a not so insignificant drop of 14.61%.
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