Roll the clock back to 2006, and the Northampton property market was catching its breath from a heady run of five years of almost annual double digit house price inflation. A number of homeowners and landlords, who own property in Abington, have made contact with me recently asking for my thoughts on the future of the property market in Abington. In previous articles, we have talked about Abington’s history of property values, rents, tenant demand and yields; all important matters for a homeowner or landlord, but we haven’t discussed the future.
Year on year – Abington property values have risen by 6.7% (compared with 8.3% growth the twelve months before that). That doesn’t sound great, but when you compare that against inflation – its rather good. Inflation, as calculated by the Government’s Consumer Prices Index, rose by 0.3% over the last 12 months. The report said it had risen to the those ‘heady’ levels by smaller falls in supermarket and petrol prices than a year ago. So most of that 6.7% is real growth .. real spending power. Good news all round, however, before we all crack open the Champagne, spare a though for those who bought at the last property peak in the late noughties (just before the Credit Crunch), when property values in the city dropped by 20.07% between the peak of January 2008 and bottom of the market in June 2009. (although I am pleased to inform you we have more than made up for that loss since)
The reality is we have had a few years of decent market conditions in Abington. The big question moving forward is whether the Abington property market will now be held back by affordability and restricted mortgage lending, and what long term impact this will have on the Abington property market.
Looking at the Northampton as a whole, because we can’t look at Abington in just its little own bubble, people’s earnings remain below inflation and the possibility of an interest rate rise over the coming year, appear to have tempered housing demand. This weakening in demand has led to a modest easing in both property price growth and sales.
However, everything is relative, because if your property rises in value, the one you want to buy rises as well. I believe we will see another year of modest growth of 4% to 5%. If the country votes to leave the EU, this might be tempered slightly, but not much.
Looking at our Buy to let landlord friends, long term property values which track peaks and troughs are more helpful to them. The questions I seem to be asked on an almost daily basis by landlords are:-
· “Should I sell my property in Abington, or even buy another?”
· “Is the time right to buy another buy to let property in Abington and if not Abington, where in Northampton?”
· “Are there any property bargains out there in Northampton?”
If you are ever passing our office, I would love you to pop in for a coffee to discuss the Abington or Northampton property market, how Abington as an area compares with its closest rivals in Northampton, 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