It is midway through February and Rotherham property values are unexpectedly 6.1% higher than at the end of 2017. With the uncertainty of Brexit, it’s hard to know what will happen but this has exceeded all the predictions of economists, which is an astonishing sign of strength for the local Rotherham (and wider national) economy.
Whilst these Land Registry statistics are positive, they come after a lethargic year for the number of properties in Rotherham compared to the actual prices achieved for those properties.
Read on for a brief overlook of the local property market and predictions for the rest of 2019.
The average value of a Rotherham property today currently stands at £152,200: how will it grow in the future?
It’s important for landlords who are buying a property as an investment for later in life to understand the value of properties. The average value of a Rotherham property is at a pretty decent level but it’s important to consider the finer details.
Property sales in our area over the last 12 months is somewhat lower than the 20 year average (2,159 sales compared to 2,914), indicating a recent trend of people moving less.
At Bricknells, our perspective is that property value growth will be more reserved in 2019 after two decades of weaker wage rises. One of main drivers in the demand (and thus the price people are prepared to pay for a home) is the growth of peoples wage packets. Unfortunately, our property values are 166.79% higher than they were in January 2002, yet average salaries are only 76.1% higher over the same time frame. This means over the last few years, with average property values so high compared to salary/wages, many potential buyers have been priced out of being able to purchase their first home.
Not all doom and gloom
At first glance, these stats are actually rather positive during this reported time of political uncertainty and the height of Brexit commotion. The press have always looked for the bad news and whilst we are not entering into the pros and cons of Brexit itself, the numbers do stack up quite well since the Brexit vote took place nearly 3 years ago. How things move forward in the next two months will determine the true legacy of political events.
When taken with the recent reduction in short to medium term number of property transactions (i.e. the number of properties sold), it should be noted that a lot of the this buoyant house price increase has a lot more to do with a shortage of properties on the market rather than an uplift in the housing market generally.
And we can’t forget that Rotherham isn’t in its own little bubble, as there are noteworthy differences across the UK in property value inflation. House prices in London and the South East have hardly risen or even fallen in some places, whilst in the Midlands and further north they have generally increased.
Our recommendation is that buy-to-let landlords in our area should expect house price growth to remain stable between 1.3-2.3% by the end of this year (with a slight dip in the summer)… as long as nothing unexpected happens in the world economically or politically of course!
If you need any advice regarding making an investment in the property market please get in touch with us. We also post the latest property tips for investors in our area to help those wishing to expand their portfolio. Be sure to pay a visit to that section of our website!