Thursday, 4 December 2014
What is really happening in the Derbyshire property market?
In Derbyshire (excluding the city itself), property prices are still 11% below the level that was achieved in the 2007 property boom (before it went pop in early 2008 with the credit crunch). If Derbyshire people sold their properties today, the cost of living has increased by 19% over the last seven years too, so the money they would get from the property would actually be, in real terms, 30% lower ( 19% inflation/cost of living + 11% below the 2007 boom) than if they’d sold in 2007.
Average Derbyshire house prices are in a constant state of microflux. Over the last nineteen months, the trend has been in an upward direction. The price of a typical Derbyshire home increased by just 0.2% in September, whilst in August they rose by 0.6% and in July 0.8% (but in May they remained stagnant at 0%). Looking at monthly figures can be dangerous, so looking at the Land Registry figures, the annual rate of Derbyshire house price growth moderated in September to 5.3% from 5.7% in August.
The slowdown was not entirely unexpected, given mounting evidence of a moderation in activity in recent months. Mortgage approvals declined by almost a fifth between January and May, and there has also been some softening in forward looking indicators, such as new buyer enquiries. But on the other side, with the labour market strengthening, landlords are looking for a home for their savings, mortgage rates are expected to remain low and with consumer confidence rising activity is likely to recover in the months ahead.
Rightmove have recently released some data on Derbyshire and the immediate area, and they make fascinating reading. The peak of the property market last decade in Derbyshire is recognised as November/ December 2007. Whilst property values are still 11% lower than that boom, homeowner’s asking prices are 0.3% higher than the 2007 boom. Therefore, there is an argument to say, some (not all) Derbyshire asking prices are a little high but the price the properties are actually selling for, is a decent and reasonable figure. .. there you should always make a decent and realistic offer!
It all comes down to doing your homework, asking questions of the agent and the owners. Find out their motivation for selling and see if you can ‘bag that bargain’. Trust me they are still out there. As we don’t sell property, I can look at the whole of the market and give you an honest opinion on its investment potential. In fact very soon, I will be starting to put on what I consider the best buy to let deals there are on to the ‘Spruce Property Blog’.