A number of landlords, who own property in Northampton, have made contact with me recently asking for my thoughts on the future of the property market in Northampton. I always like to talk about the Northampton property market, and in future articles intend to share with you my thoughts on the local property market, its history of rents, property values, tenant demand and yields; all important matters for a landlord, but today I wish to discuss what has happened in the last 12 months.
Property values rose by 7.1% in Northampton in the last 12 months. Good news all round, but when you consider property values in the town have previously dropped by 21.34% between December 2007 and May 2009, this is not as good as the media would have you believe. It should be no great surprise to hear that Northampton property values are starting to slow up as we head in to the New Year. Property values in the town were growing at an impressive 1.2% in the Spring months of 2014, but by Autumn months, they slowed down considerably, rising barely over 0.5% a month.
The reality is we have had two years of decent market conditions in Northampton, but now all that pent up demand is starting to fade. The big question moving forward is whether the Northampton market will now be held back by affordability and restricted mortgage lending, and what long term impact this will have on the Northampton property market.
Looking at the UK as a whole, because we can’t look at Northampton in just its little own bubble, the recent rapid rise in house values in some parts of the UK in the early part of the year (especially in London), along with earnings growth that remain below inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand. This weakening in demand has led to a modest easing in both property price growth and sales. A moderation in growth looks likely into next year as supply and demand become increasingly better balanced.
Now with the General Election on the horizon, whichever Government takes power, they, along with the Bank of England, have a thorny job to do in balancing the expected rise in interest rates with the continued resurgence of the housing market, to ensure the property market doesn’t drop and drag down the economic recovery forcing people into selling their property at a loss.
However, back to Northampton, long term property values which track peaks and troughs are more helpful to landlord investors. The questions I seem to be asked on an almost daily basis by landlords are:-
· “Should I sell my property in Northampton, or even buy another?”
· “Is the time right to buy another buy to let property in Northampton and if not Northampton, where?”
· “Are there any property bargains out there in Northampton?”
Many other Northampton landlords, both who are with us and many who are with other Northampton letting agents, like to pop in for a coffee to discuss the Northampton property market, how Northampton compares with its closest rivals (Bedford, Milton Keynes, Kettering and Rugby), and hopefully answer the three questions above. I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion.
In the meantime may I take this opportunity to wish you all a very prosperous 2015.