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Slowing Horncastle Property Market? Yes and No!

Article Simon Jory 2017-10-02
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Slowing Horncastle Property Market? Yes and No!

My thoughts to the landlords and homeowners of Horncastle...

To answer that, we need to go back 50 years.

The tightrope of being a buy-to-let landlord is a balancing act many do well at. Talking to several landlords, they are very conscious of their tenants' capacity and ability to pay the rent and their own need to raise rents on their rental properties (as Government figure shows 'real pay' has dropped 1% in the last six months). Evidence does suggest many landlords feel more assured than they were in the spring about pursuing higher rents on their properties.

During the summer months, historic evidence suggests that the rents new tenants have had to pay on move-in has increased. June/July/August is a time when renters like to move, demand surges and the normal supply and demand see-saw means tenants are normally prepared to pay more to secure the property they want to live in, in the place they want to be. This is particularly good news for landlords as average Horncastle rents have been on a downward trend recently. So look at the figures here...

Rents in Horncastle on average for new tenants moving in have risen 1% for the month, taking overall annual Horncastle rents 3.2% higher for the year.

However, several Horncastle landlords have expressed their apprehensions about a slowing of the housing market. I think this negativity may be exaggerated.

Property values and rents in Horncastle

The other side of the coin to property investing is capital values, which will also be of interest to all homeowners and buy-to-let landlords. I believe the Horncastle property market has been trying to find some level of equilibrium since the New Year. According to the Land Registry...

Property Values in Horncastle are 7.83% higher than they were 12 months ago, rising by 2.77% last month alone!

However, the reality is the number of properties that are on the market in Horncastle today has dropped by 28.8% since the New Year and that will have an interesting effect on short-term property values. As tenants have had less choice, buyers also have less choice.

Be you a homeowner or landlord, if you are planning to sell your property in the short-term, it is crucial, that whilst you allow room for negotiation, you must still realistically price your property when you bring it to the market. Given that everyone now has access to property details, including historic stats for how much property has sold for, buyers will be more astute during the offer and negotiation stages of a purchase.

Even with this short-term decrease in the number of properties for sale, property prices will remain stable and strong in the medium to long term. This is because the number of properties on the market today is still way below the peak of summer of 2008.

Compared to 2008, today's lower supply of Horncastle properties for sale will keep prices relatively high... and they will continue to stay at these levels for the medium to long term.

Less people are moving than a few years ago, meaning less property is for sale. Fewer properties for sale mean property prices remain relatively high and this is because of a number of underlying reasons. Firstly, buy-to-let landlords tend not sell their properties as often than owner-occupiers, consequently removing the property out of the housing market selling cycle. Secondly, there is a dearth of local authority rental housing so demand for private rented housing will remain high. Then we have the UK's maturing owner occupier population, meaning these older people are less likely to move compared to when they were younger. Another reason is the lack of new homes being built in the country. We need 240k houses a year to be built in the UK and we are currently only building 145k a year. Finally, the new mortgage rules introduced in 2014 about how much a person can borrow on a mortgage has curtailed demand.

Some final thought's before I go - to all the Horncastle homeowners that aren't planning to sell - this talk of price changes is only on paper profit or loss. To those that are moving... most people that sell, are buyers as well, so as you might not get as much for yours, the one you will want to buy won't be as much.

To all the Horncastle landlords – keep your eyes peeled – I have a feeling there may be some decent buy-to-let deals to be had in the coming months.

Sources:

  1. Stats for rents from Homelet Index
  2. Stats for Land Registry for your Council
  3. Number of Houses on the market - home website sources Righmove, Zoopla and other websites
  4. Real wages Stats - Office of National Statistics

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MEET THE TEAM

Simon Jory

Simon Jory

Simon has been in Estate Agency for over 32 years and is a Fellow of the National Association of Estate Agents. Having working in all kinds of changing market conditions he is well placed to advise on how best to sell your home.

Anne Pearce

Anne Pearce

Anne prides herself on working to the highest standards and believes everyone should receive the best possible customer service. With over 20 years' experience she will not miss and opportunity.

Dawn Bannister-Law

Dawn Bannister-Law

Prior to moving to Lincolnshire, Dawn was a valuer for more than 19 years in Bakewell in the Peak District. Dawn strongly believes buyers, sellers, landlords or tenants are all as important as each other

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