According to the Land Registry’s latest House Price Index for Lancaster and the surrounding locality, the value of apartments/flats are rising at a faster rate than terraced/town houses, semi-detached properties and even detached property.
Values of apartments in Lancaster have increased by 3.26% over the past year, which is proportionally 93% more than the Lancaster average rise of 1.69%. The last time flats/apartments in Lancaster out performed all the other types of property, by such a gulf, was back in the summer of 2003. For comparison, the other property types performed as follows ..
- Detached homes rose by 1.61%
- Semi-detached homes rose by 1.56%
- Terraced/Town-Houses rose by 1.32%
This moderately increasing rate of property value growth is opportune – but no one should confuse it with a strong and vigorous healthy Lancaster property market. Instead, it is somewhat an indicator of the long-lasting lack of property on the market. In fact, I have spoken about the lack of homes for sale in Lancaster on a number of occasions in my Lancaster Property Blog and whilst it isn’t as bad as it was 12 months ago – choice is quite limited for buyers.
The average property value in Lancaster now stands at £189,400.
When split down into property types ..
- Lancaster Apartments at £134,700
- Lancaster Detached at £332,300
- Lancaster Semi-Detached at £178,700
- Lancaster Terraced/Town-House at £148,100
So why have Lancaster apartments performed so well, and is it just a Lancaster thing?
When I scrutinised the figures for the rest of the UK, it appears that apartments are pacemakers in the clear majority of the country. Of the 379 local authority areas in the UK, the value of apartments is rising faster than detached, semi-detached and terraced houses in 320 of them.
So, should Lancaster apartment owners be getting out the Champagne? Well, I would keep it on ice as the Land Registry figures are notorious for short term fluctuations. It’s hard to have faith in the fact that Lancaster house values rose rapidly last month given that, in the last six months, the Land Registry has frequently made downward revisions to their first published House Price Index figures.
Thankfully, the bigger picture from the Council of Mortgage Lenders (CML) stated that home buying activity last month was up 2% over the same month in 2016 – not bad as we have had the Autumn, Winter and now Spring since Brexit. The CML stated first time buyer’s levels of affordability was being squeezed and that the average amount borrowed by those first-time buyers dropped slightly last month, but the overall amount borrowed (by all buyers) was an impressive 12% higher than the same month in 2016.
So, what next for the Lancaster Property market?
I believe the uplift in the values of apartments is a short-term blip. The real issue is with the way wage growth might not keep up with inflation as the effects of 2016 exchange rate sucks in inflation (meaning real wage growth stagnates). This will mean buyer demand growth will be curtailed and with property values already so full, I believe a renewed hastening in house price growth is unlikely.
I believe we are starting to return to the housing market we saw in the mid 1990’s, Steady demand, steady supply – nothing silly when it comes to house price growth. Therefore, I believe, with what is happening around us – this isn’t a bad thing at all. HMS Lancaster Property Market…. “Nice and steady as she goes”, says the Captain