East Midlands property asking prices jumped by more than £4,000 to £181,100 in February according to Rightmove, an increase of 2.3% from January and 4.7% higher than a year ago. After the traditionally quiet months of January and February, the property market has started to warm up, but talking to some Northampton Estate Agents, they are reporting their lowest ever stocks of quality property for sale. However, asking prices have no relation to what a property sells for (i.e. their REAL value); is the issue a lack of supply?
Putting aside Northampton’s continual housing supply shortage, (we only built 7,909 properties in the last decade but the population of Northampton grew by 17,611 this is now, according to some people, being exaggerated by an increase in homes being owned by buy to let investors, who tend to be buying a property as part of a long term pension plan and are more likely to keep it for longer than an owner occupier would. I have also seen unwillingness among homeowners looking to move, to put their own property on the market as they can find few suitable properties to make it worth their while going through the whole moving process.
Talking to some Northampton landlords only last week, I said that I believe this is the new norm in the Northampton property market, and is the consequence of over 35 years of not enough homes being built to meet the escalating growth in household numbers, resulting in a lack of quality homes for sale in many popular areas of Northampton.
When one looks at the historic data, in October 2007, there were 3,612 properties on the market in Northampton compared to today’s 1,403. Should we be worried? Well in April 2010 there were only 1,618 properties for sale in Northampton but seven months later in November 2010, this had jumped to 2,210 properties, for it to drop to 1,189 properties in February 2014. The number of properties on the market is a cyclical thing in Northampton, it always has been and always will be. As we go into the spring of 2015, the number of new properties coming onto the market will increase… just as the daffodils will flower.
So are landlords to blame? Well, on one side of the coin, yes they are. If they buy a property to rent out, that means someone can’t buy it to live in. However, it doesn’t matter if someone wants to live in a property if they can’t afford the deposit and upkeep… and the youngsters of Northampton still need a roof over their head. So, on the other side of the coin, if the Council aren’t building any properties and people can’t afford the large deposit for the mortgage, then Northampton landlords have stepped in and bought property to rent out to them. Northampton landlords have bought 8,994 properties over the last decade (investing approximately £1.81bn buying those Northampton rental properties), meaning there were, at the last count, 14,657 Northampton properties being privately rented out to tenants. Northampton tenants are in fact getting a good deal as well, as average rents in Northampton are 4.5% below where they were seven years ago. That sounds like a win-win situation for everyone to me. Stop blaming landlords and start building more properties in Northampton… that is the only answer.
In the meantime, the demand from Northampton tenants for Northampton property is only set to rise over the coming years. If you want some advice and opinion on where (or not) to buy, please feel free to pop in and see at my office on the Wellingborough Road.