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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Year of ‘Optimism’ ahead?

I was fortunate enough to witness Plymouth Argyle play so admirably against the mighty Liverpool FC last Wednesday night in the FA cup replay. Over 17,000 fans were willing the Green Army to level the cup tie and take the game into extra time – but alas it wasn’t to be. But what a great spectacle and event for the city. I came away from the match proud of what my City had done on the pitch and optimistic that the good showing against a stronger team can push Argyle onto promotion.

I like Optimism. I’d say personally I am typically an optimistic person and Mansbridge Balment are ambassadors of ‘Optimism’ if you like. We are also realists and will tell it how it is when needed to of course and 2017 is fraught with possible dangers for the housing market. Possible interest rate rises, ‘Brexit’ hanging around the corner looking to strike, but regardless of whether you voted to stay in or out in the last referendum, if you look for problems or potential reasons not to do something, you will find something.

There are those that could state that Liverpool only put out a ‘youth side’ albeit a few exceptions and Argyle couldn’t even beat them – but I’ve never been a person to listen to ‘nay-sayers’ and I always sail on the coat-tails of optimism. Having the right mind-set can get you a long way in life and it’s amazing how a change in mood can affect people’s attitude towards things.

Estate agency is no different. The appetite to move is typically enhanced when jobs and the economy are secure and people are at a good place in their life (a successful football team further enhances the feeling too of course!) The optimism of an exciting ‘new chapter’ can be a beautiful thing to be involved in.

We’re just waiting for the final property price data to come through from 2016 but our estimates still show strong numbers. Stats show that the market in Plymouth is changing compared to previous years. Based on Land Registry, Office of National Statistics and Resi-analytics trend information we estimate that 801 flats, 1815 terraces, 742 semi-detached and 290 detached properties were sold in Plymouth during 2016. Taking a longer-term property view against the last decade, sale levels in the City paint a promising picture moving ahead (see graph below).

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I’ve spent long enough in Estate Agency to know that there is no point worrying about things that are out of your control. The market is moving well. Although we’d always like more, our offices have a healthy stack of new properties and a list of eager new applicants have registered looking to purchase. Whatever the impending Brexit and the knock-on effect it brings, let’s be mindful of it and other things that may happen in the near future when making decisions, but not let it rule our life choices.

Now back to football and the prospect of Plymouth Argyle playing in the Premier League in 3 years time? Too optimistic? There were those who said they’d never get a draw against Liverpool in the first leg weren’t there?…

Internet V Traditional Estate Agency and the rise of the machines

I was reading in an estate agency magazine last week about the ‘Rise of Machines’ and whether the internet estate agency model could really replace the high street agent. It reminded me of a conversation that I had with a vendor last week.

The conversation started off with me waxing lyrical about how we market property and why we do it in a certain way. I’d had two very similar conversations earlier on in the day but this time it went completely off track when the vendor asked me how I was going to vote in the EU referendum.

Personally, I’m undecided yet I see plenty of positives for sticking with the status quo. But what if it was better spreading our horizons a little bit further? For a business, there lies the eternal question. Stop a dozen people in the street and you won’t find a universal answer to the EU in / out question. But maybe that’s down to all this constant verbal diarriah we hear everyday about the pros and cons. Politicians who tell us made up figures based on what they think we want to hear? In business as in everyday life they’ll always be someone who prefers shop B to shop A. In business, we need variety, different options, constant innovation and a need to adapt to what the consumer wants.

I got back to reading through the article and amongst the words ‘online’, ‘fee saving’ and ‘modern’, I also read ‘trust’, ‘face to face’ and ‘service’. Whilst the ‘internet agents’ tailor their own offering by taking bits of traditional estate agency to suit their business model, the smarter traditional estate agents take parts of ‘internet estate agency’ to service their own perceived view of what the client really wants.

The trouble with all this is that rather than having distinct differences between businesses we run the risk of having estate agents who each have bits of what the others offer and there is a danger that a once clear gap of difference is further diminished. The choice for the vendor then has a danger of just coming down to who is the cheapest.

As my Gran used to say ‘there is no such thing as a free lunch’ and whilst many lower fee agents seem attractive, what I’ve witnessed from those type of agents in the Plymouth area in the last few months are long tie-ins, with-drawl fees and properties selling at lower prices than they should have. I’ve also heard horror stories about the service that they have given (or lack of). Despite all this I still see properties on the market with these agents.

One box does not fit all and the Internet estate agency model will not replace the high street agent. Believe me, I place myself as an innovative agent and if having a high street office did not work for us, then we’d shut up shop tomorrow and trade from elsewhere. We are certainly not there yet and the benefit of having buyers and vendors able to visit us 7 days a week – without an appointment – still is a strong enough reason to continue doing what we do.

We are not a low fee agent. Our difference is in our service.

When ‘experts’ in magazines can’t agree on what is right for the customer – perhaps us as ‘agents’ simply have to speak to our customers and ask them ‘what they want’ in the future. Rather than telling them ‘what they need’?

Brexit and Plymouth Property market – 24% more properties on the market

April Fools Day was no joke for some landlords, as they rushed their buy to let property purchases throughout late March to beat the extra 3% stamp duty George Osborne imposed on buy to let properties after the 31st March 2016. Because some investors brought forward their 2016 property purchases to save the extra tax, speaking to fellow property professionals in Plymouth, all of us have noticed, since the clocks went forward, demand to buy in April and May from these landlords has eased.

 

Then we have the Brexit issue, which is also having a tempering effect on the Plymouth property market – although if you recall I wrote about this a few weeks ago, and whilst an exit will have an effect – it won’t be the end of the world scenario some commentators are suggesting. In another article I wrote previously, I spoke of the growth rate of Plymouth property values, and whilst the rate of growth is slowing, Plymouth property values are still 1.1% higher year on year, albeit the growth rate month on month has started to moderate when compared to the heady days of month on month rises of 2014 and 2015. Interestingly though, a very recent members survey of the Royal Institution of Chartered Surveyors states that only 17% of members believed property values would increase over the next Quarter compared to 44% at the end of 2015.

 

All this had led to increase in the number of properties for sale. For example in the PL3 postcode, which mainly comprises of Efford, Hartley, Laira, Mannamead, Milehouse, Peverell and Higher Compton, there were 220 properties for sale in the postcode in December (of which 33 came on to the market for the first time). In January, February and March, 241 properties came onto the market in the postcode district (or an average of 80 per month), meaning by end of the first Quarter, there were 273 properties available for homeowners and landlords alike to buy in PL3 (i.e. a rise of 24% more properties for sale). These figures are mirrored in neighbouring postcodes throughout the Plymouth area.

 

Nevertheless, I believe this easing of the Plymouth property market is a good thing, as investment landlords wont have to pay top dollar to secure a property because of the lower competition. On the face of it, this easing should be bad news for the 131,241 Plymouth homeowners, but nothing could be further from the truth. The majority of homeowners that move, move up market, (i.e. from a flat to terrace/town house, then a semi and then detached), so whilst last year you would have achieved a top dollar figure for your property, you would have had to have paid an even higher top dollar to secure the one you wanted to buy. The Swings and Roundabouts of the Plymouth Property Market!

 

However, all the signals suggest that whatever the aftermath of the approaching EU referendum, in the long term, the disparity between demand for Plymouth property and the supply (i.e. the number of actual properties) will still exercise a sturdy and definitive influence on the Plymouth property market. It would surprise me that if by 2021, whichever way we vote in late June, assuming we don’t have another credit crunch or issues like a major world conflict, property prices will be between 20% to 22% higher than they are today.