Friday, 10 October 2014
Should you be buying property in Belper?
A number of landlords, first time buyers and investors have approached me recently, asking about the Belper property market. With all these headlines of massive increases in property values in the UK, should we be worried we are about to have a price crash? We are at the early stages but the economy is now actually looking a lot healthier and there are signs we are seeing an actual recovery after several false starts.
I am of the opinion that over the last few years, whilst mortgages have been a little more difficult to obtain than the last decade of the 2000’s, this lack of mortgages has produced some pent up demand for property. Now we appear to be on the other side of the financial crisis, and the banks are more willing to lend, this is why sales, prices and first-time buyer numbers have improved so rapidly. It has been like opening a shaken can of fizzy pop. You get the initial fizz of activity, and then it flattens. What we're seeing is a relatively normal market correction, not a quick transition from a recession to a boom.
Property values in Belper have risen, on average by only 3.81% in the last 12 months. When I look at the East Midlands as a whole, prices have risen by 7.9% and nationally by around 8.7%. Compared to the boom years of 2001 to 2004, when property values increased by 20% in 2001, 33.9% in 2002 and 8.4% in 2003 in Belper, I cannot see why some are concerned about an unsustainable price boom. I believe house prices are rising off a low base and talk of a housing bubble in relation to the national market is overdone. We are seeing continued exceptional property price growth in London combining with modest gains across other regions and creating a picture of a broadening market recovery, and I expect prices to continue to rise in the short term.
Speaking to others in Belper, the issue isn’t house price inflation, but a lack of realistically priced properties coming onto the market for sale, a lack of supply. So should you be buying a property in Belper? Now is a good time to buy, provided you accept prices may fall again in a few years. It depends on how long you plan to own the property (whether as a home or investment), whether it personally suits you and most importantly whether you can afford it. Belper first time buyers preparing to take the plunge should bear these factors in mind. The biggest issue must be that buyers ensure they can take the hit of future interest rate rises and therefore, I ask the first time buyers of Belper to make sure you'd be happy in your new home, because you could be stuck there in five years' time.
Landlords tend to buy for the long term, so these short term movements don’t tend to affect them as much. The lack of supply in Belper of new properties coming onto the market indicates people wanting to buy have to move quickly, and don’t have the luxury of a few weeks to decide to view the property. However, my findings show that first time buyers and landlords in Belper aren’t prepared to pay over the odds for a property to secure it. Maybe, just maybe, the memory of the 2008 price crash has given a dose of realism to the optimistic Belper property market?