What does the future hold for house prices in Plymouth?

There have probably never been more factors at play in the UK property market than there are right now. The national market is pausing for breath as it reaches the end of the cycle which started with the credit crunch. 2016 saw stamp duty changes as well as the Brexit vote, and the impact is very much still being felt. The result of the election has added to the uncertainty surrounding the economy.

Now that Brexit negotiations are getting properly underway, it will be interesting to see if it has any further direct effect on the market. Since the original vote, interest rates were dropped to 0.25 per cent to support the economy. This has resulted in property prices rising nationally by 7.2 per cent – and we expect them to grow by a further 6.6 per cent over the next 12 months. Locally, prices in Plymouth have increased slightly too due to the lack of property available and buyers competing to gain a purchase. This is of course good for sellers but not so good for buyers – especially if you are in a chain – as often properties are being sale agreed to those without a chain, thus presenting a lesser risk to the seller.

So why are we so bullish about the market in Plymouth? Well the data shows us that in the second half of 2016, sales levels were 1.6 per cent higher than the first half, which is even more impressive when we account for the stamp duty rise in April of that year. Based on market trends, we expect the price of the average home here to reach £173,300 by the end of 2018.

Projecting future price trends is never straightforward. The construction of new homes impacts on this heavily; residential developments will often increase the value of other properties in the area due to the way valuers use ‘comparables’. Other important aspects they consider when determining the future value of property are upgrades to travel networks and new businesses opening in the area. With several developments ongoing in the City it is generally good news for many resale properties in those areas.

The future looks bright for the local property market; now is the time to think about getting on it if you’re not already, especially while interest rates remain so low.

If you would like to sell your property, pop into one of our two Plymouth offices 7 days a week for a friendly, professional chat with one of our local experts. We’d love to help.

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How many new homes have been built in the local area?

New housing is a hotly debated subject in the UK. Despite the recent uptick in building rates, demand continues to outstrip supply and more affordable homes need to be built. The situation has improved over the last few years; the number of new homes started and finished in the UK is at a nine-year high. However, forecasts show that England alone needs to build 50 per cent more homes to keep up with demand, so the issue is far from resolved. The pressure is mounting on the government to find a solution.

156,140 new homes were registered for construction in 2015, the highest it has been in eight years. This was half a per cent higher than the previous year and 45 per cent higher than 2009.

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From 2014 to 2015, private sector starts increased by seven per cent, while Housing Association starts rose by five per cent. That means that since the credit crunch in 2008, the UK housing stock has grown by around five percent, which is no small feat.

We estimate there have been 62 new build starts in PL6 in 2015–16. Over the same period, there have been an estimated 57 new properties completed. To reach these figures, we’ve applied a proportional amount of the government’s district-level house building figures to PL6 to estimate levels of new stock in the local area.

Despite all this building, the issue facing aspiring home owners is that demand for housing is still far greater than the current supply. When new build properties come on to the market they tend to be for a premium. However, there are several schemes to help buyers purchase new build homes at discounted prices. One of these is Discounted Sales, a scheme available from some councils that allows you to buy a new home at a reduced rate.

The low homes to people ratio is good news for buy-to-let landlords. With 28.6 per cent of residents in PL6 renting property, potential investors can be optimistic at their chances of finding tenants if they decide to purchase a rental property. Rental demand is high, which means void periods should be minimal.

With several new developments already underway in the North of the City and the exciting new Eco Village Development ‘Roborough Park’ in Bickleigh due to launch this Summer, there really isn’t a better time than now to obtain a free valuation from Mansbridge Balment and plan for your future new home purchase.

If you would like to have a chat about new build possibilities, any other property that has taken your fancy, or you would like to sell your home, don’t hesitate to get in touch with us. We’d love to hear from you.

RAMMU0059-02Flat and house prices in PL6

With increasing clarity from the government, the housing market is returning to its usual stride. Looking at quarter-on-quarter price data in PL6, we can see that the average sold prices of flats is up 11.7 per cent since the third quarter of 2016.

Promising sales levels in PL6

The weather may still be warming up outside, but it’s already a hot time of year for the property market. The expected uptick in sales has materialised as you can see from the chart. Particularly notable are sales levels of detached properties, which have increased 36.9 per cent since the last quarter of 2015.

Occupancy levels in PL6

Want to know how in demand properties in a given area are? Occupancy is a useful indicator for demand, as well as illustrating how spacious or cosy properties are in the local area. In PL6, 52.4 per cent of properties have two or more extra rooms and 24.6 per cent have one extra room.

How many second home owners are there in PL6?

The number of second homes registered in a local area can really give you a feel of if the area is right for you. In PL6, the mix is as follows:

No 2nd address 95.2%
2nd address within the UK 3.8%
2nd address outside the UK 1.1%

(Dated May 2017)

How best to increase the value of your home

When it comes to selling your home, the goal is to achieve more than the initial price you paid when you bought it. A significant amount of your home’s resale value will be affected by the appreciation of house prices in Plymouth, where average sales values have risen by 13.7% over the last 10 years. However, if you want to achieve the maximum sale price for your property, there are several home improvements you can make that will add to the overall value.

Creating an extra bedroom, especially with a loft conversion, offers the best return for your money. Although initial costs are not inconsiderable, a double bedroom could add 11 per cent to the value of your home, a gain of £18,800 on average Plymouth properties. Budget carefully according to your house size and current market value, and you could be onto a winner.

Space commands a premium, so you should create more of it in your property if the opportunity arises. Extra space can transform the whole look and feel of your home, adding value and making it more desirable to house hunters. By adding extra square footage, you can increase your property’s overall value by as much as nine per cent. That would be an extra £15,400 if we go by the average property price in Plymouth which is £170,900.

Kerb appeal is often overlooked by sellers when they put their house on the market, yet it is one of the most important aspects to not only adding value to your home but making it look appealing to the first-time viewer. The outside of your property is the first thing any potential buyer will see, so you want to give it the ‘wow’ factor. A £300-400 spend on the exterior and front garden/driveway could add up to four times the initial outlay to the overall value of your home and cut down the length of time it takes to sell the property.

Buy-to-let landlords will want to make sure their rental property is in the best condition to achieve maximum yields. Furnished properties can often rent faster than those that are unfurnished (but do check with us as it depends on the type and location). It is also a good idea to update the interior and exterior of your property every three years by painting the walls, cleaning the outside space and replacing furniture to stop it looking dated. A fresher looking property will increase its chances of renting more quickly and nullifying potential long void periods.

Weighing up the potential cost of any home refurbishments is important. But even an increase of around 10% to the overall value of your property can be the difference between buying your dream home or having to compromise on something you’re not so keen on. If you want to find out more about how much value you can add to your home, pop into our office and have a chat with us. We are always happy to help.

Total housing market value in Plymouth

The total housing market value is a combination of the number of transactions and the average property price in a given quarter. It can give a real idea of the buoyancy of the market in Plymouth. The first quarter of 2016 was the largest quarter (27.5%), closely followed by the final quarter of 2015 (27.0%).

Promising sales levels

Increasing clarity in the UK’s economic future has increased confidence in the property market. A look at sales levels in Plymouth over the last 15 months seems to indicate this too. Since May 2016 sales levels for flats are up 27 points and houses are up 11 points since April 2016.

Household size mix in Plymouth

From individuals to large families, the spread of household size can indicate the likely availability of appropriately sized properties. The most common size of household in Plymouth is two occupants, and makes up 34.3% of the total households in the area.

 

What is the property tenure composition in Plymouth?

One of the real tests to see if an area is suited to your tastes is to look at the composition of the household tenure types. In Plymouth, the mix of different household tenure types is as follows:

Owned outright 24.0%
Owned with a mortgage 30.1%
Shared ownership 0.8%
Social rented 22.7%
Private rented 22.4%
(Dated April 2017)
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Which is the best month to sell your Plymouth property?

BestMonthPlymouthHomeI had a homeowner from Mainstone email me the other day. She said she had been following our blog http://www.plymouthpropertynews.wordpress.com for a while and wanted to pick my brain on when is the best time of the year to sell a property. Trying to calculate the best time to put your Plymouth property on the market can often seem something akin to witchcraft and, whilst I would agree that there are particular times of the year that can prove more productive than others, there are plenty of factors that need to be taken into consideration.

 

Even if you are putting your property on the market, you don’t know how long it will take to find a buyer – no crystal ball to help with that one. At the moment, the latest set of figures for all 54 estate agents in Plymouth, show the average length of time it takes to find a buyer for any Plymouth property is as follows ..

 

Detached                    147 days

Semi                            96 days

Terraced                     104 days

Flat                              150 days

Overall average          124 days

 

 

If we roll the clock back to January 2016, the overall average time it took to find a buyer (again using data from all of the 54 Plymouth Estate Agents) was 155 days.

 

So, on the face of it, things have vastly improved over the last six months or so. Well, when I looked at the data going back to 2008, the average length of time it takes to sell a property drops between January and the Summer months, for it to rise on the run up to Christmas. For example ..

 

Winter 2008 – 157 days           Summer 2008 – 112 days

and in more recent times …

Winter 2013 – 160 days           Summer 2013 – 160 days

Winter 2014 – 148 days           Summer 2014 – 131 days

Winter 2015 – 143 days           Summer 2015 – 132 days

 

Coming back to the present, even if you placed your property on the market today in Plymouth, if it takes you on average a little under eighteen weeks to find a buyer, then you can expect solicitors and the chain to take an additional eight and twelve weeks after that, before you move. It comes down to personal choice as to when you place your property on the market. Children often affect the decision. On one side you might delay putting that for sale board in your front garden so you can move in the summer school holidays, but on the other side, you might want to move sooner to be in the catchment area of a preferred school, in plenty of time for the next academic year?

 

There are times of the year when it’s better to sell, and times when waiting a little longer can pay off in the long run. In a nutshell, I would say this is the way of the seasons ..

WHEN THE MARKET?

Spring: Customarily there are more house-buyers as the Daffodils show themselves

Summer: Sellers may miss out on house-buyers being on holiday

Autumn: The enthusiasm for buying homes returns

Winter: Interest diminishes as festive period looms

What this means to buyers and landlord investors is that they often pick up a bargain in later months of the year, as there is less competition from owner occupiers. So, whilst there are better months to achieve a quicker sale, the only piece of advice I can give to every home owner and landlord in Plymouth, is do the right thing for yourself, do your homework and buy (and sell) with both your head as well as your heart

 

For more thoughts on the Plymouth Property Market – visit http://www.plymouthpropertynews.wordpress.com

Has owning a home become an unattainable dream for the 3,923 Plymouth 28 year olds?

My parents bought their first house in the 1970’s, they were in their early 20’s. Interestingly, looking at some research by the Post Office from a few years ago, in the 1960’s the average age people bought their first house was 23. By the early 1970s, it had reached 27, rising to 28 in the early 1980’s.

 

This year alone, 3,923 people in Plymouth will turn 28 and 4,475 in 2017 .. and dare I say 5,498 in 2018 .. year in year out the conveyor belt carries on .. where are the Plymouth youngsters going to live?

 

Ask a Plymouth ‘twenty something’ and they will say they do not expect to buy until they are in their mid thirties – seven years later than the 1980’s. Some people even say they will never be able to buy a property and the newspapers have labelled them ‘Generation Rent’ as they are people born in the 1980s who have no hope of getting on the property ladder. One of the major problems facing young Plymouth people is the large deposit needed to get a mortgage .. or is it?

 

The average price paid for an apartment in Plymouth over the last 12 months has been £132,200 meaning our first time buyer would need to save £6,610 as a deposit (as 95% mortgages have been available to first time buyers since 2010) plus a couple of thousand for solicitors and survey costs. A lot of money, but people don’t think anything today of spending a couple of thousand pounds to go on holiday; the latest iPhone upgrade or the latest 4K HD television. That amount could soon be saved if these ‘luxuries’ were withheld over a couple of years but attitudes have changed.

 

Official figures, from the Office for National Statistics, show the average male in Plymouth with a full-time job earns £507.30 per week whilst the average female salary is £455.10 a week, meaning, even if one of them worked part time, they would still comfortably be able to get a mortgage for an apartment.

 

I was reading a report/survey commissioned by Paragon Mortgages from the autumn of last year. The thing that struck me was that when tenants were asked about their long term housing plans, some 35% of participating tenants intend to remain within the rental sector and 24% intended to buy a house in the future, with the proportion of respondents citing the “unaffordability” of housing as the reason for renting privately increasing from 69% to 74%.

 

However, time and time again, in the starter home category of property (ie apartments), nine times out of ten the mortgage payments to buy a Plymouth property are cheaper than having to rent in Plymouth. It is the tenant’s perception that they believe they can’t buy, so choose not to. Renting is now a choice. Tenants can upgrade to bigger and better properties and move up the property ladder quicker than their parents or grand parents (albeit they don’t own the property). Over the last decade, culturally in the UK, there has been a change in the attitude to renting so, unless that attitude changes, I expect that the private rental sector in Plymouth (and the UK as a whole) is likely to remain a popular choice for the next twenty plus years. With demand for Plymouth rental property unlikely to slow and newly formed households continuing to choose the rental market instead of purchasing a property. I also forecast that renting will continue to offer good value for money for tenants and recommend landlords pursue professional advice and adopt a realistic approach to rental increases to ensure that they are in line with inflation and any void periods are curtailed.