A
number of landlords, who own property in Cambridge, have made contact with us
recently asking for our thoughts on the future of the property market in Cambridge.
We always like to talk about the Cambridge property market, and in future
articles intend to share with you our thoughts on the local property market,
its history of rents, property values, tenant demand and yields; all important
matters for a landlord, but today we wish to discuss what has happened in the
last 12 months
Over
the last 12 months, property values rose by 10.2% in Cambridge. Good news all
round, but when you consider property values in the city have previously
dropped by 18.4% between December 2007 and June 2009, this is not as good as
the media would have you believe. It
should be no great surprise to hear that Cambridge property values are starting
slow up as we head in to the New Year.
Property values in the city were growing at an impressive 1.4% a month in
the Spring months of 2014, but in Autumn months, they slowed down considerably,
rising by only 0.11% a month.
The
reality is we have had 32 months (since the Summer of 2012) of decent market
conditions in Cambridge, but now all that pent up demand is starting to fade.
The big question moving forward is whether the Cambridge market will now be
held back by affordability and restricted mortgage lending, and what long term
impact this will have on the Cambridge property market.
Looking at
the UK as a whole, because we can’t look at Cambridge in just its little own
bubble, the recent rapid rise in house values in some parts of the UK in the
early part of the year (especially in London), along with earnings growth that
remain below inflation and the possibility of an interest rate rise over the
coming months, appear to have tempered housing demand. This weakening in demand
has led to a modest easing in both property price growth and sales. A
moderation in growth looks likely into next year as supply and demand become
increasingly better balanced.
Now with the
General Election on the horizon, whichever Government takes power, they, along
with the Bank of England, have a thorny job to do in balancing the expected
rise in interest rates with the continued resurgence of the housing market, to
ensure the property market doesn’t drop and drag down the economic recovery
forcing people into selling their property at a loss.
However,
back to Cambridge, long term property values which track peaks and troughs are more
helpful to landlord investors. The questions we seem to be asked on an almost daily basis by landlords are:-
·
“Should I sell my property in Cambridge, or even buy another?”
·
“Is the time right to buy another buy to let property in Cambridge and
if not Cambridge, where?”
·
“Are there any property bargains out there in Cambridge?”
Many other Cambridge
landlords, both who are with us and many who are with other Cambridge letting agents, like to pop in for
a coffee to discuss the Cambridge
property market, how Cambridge compares with its closest rivals (St.Ives,
Peterborough and Huntingdon), and
hopefully answer the three questions above. We don’t bite, we don’t do hard
sell, we will just give you our honest and straight talking opinion.
In the
meantime may we take this opportunity to wish you all a very prosperous 2015.
