Lancaster house prices up or Lancaster house prices down? … and if so, by how much? Those of you who read the Lancaster Property Blog will know I am not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight talking opinion – so here are my thoughts for the 12,361 Lancaster homeowners and landlords.
The average Lancaster property is 0.2% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (ie consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, this is bad news for first time buyers as property affordability continues to decrease (although I was reading in The Times the other day that wage inflation (ie salary growth) is showing signs of weakening).
Some commentators have said the higher stamp duty taxes announced a few weeks ago in the Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Lancaster landlords in my blog, but I believe the real issue in the Lancaster property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or cannot afford to upgrade. However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General Election (back in May) of 200,000 new homes a year. All I can say is .. good luck George hitting those numbers!
Why do I say this? Because houses take years to build … not months! However lets put George and his fabled house building aside. Where does that leave us in Lancaster in 2016?
Let’s talk of supply. Whilst Mr Osborne builds his properties (and let’s be honest, a week doesn’t go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in January 2012, 670 properties were for sale in Lancaster. Today that figure is 578. On the face of it, this means there is less choice for Lancaster buyers. It also means with a restricted supply of properties for sale, it keeps property prices high for Lancaster house sellers.
Everything isn’t all doom and gloom though, again back in January 2012, the average property in Lancaster took 123 days to find a buyer. The latest figures state this has dropped to 105 days, a drop of 15% in how long it takes to find a buyer. When you delve even deeper, the best performing type of property today in Lancaster is the 2 bed, which takes 96 days to find a buyer (on average) compared to the 3 bed, which takes 116 days. It just goes to show, even though the average has dropped since 2012, how varied that change has been!
So, back to the question everyone is asking. What will happen to property values in Lancaster in 2016? I am going to suggest they will rise between 0% and 0.5% … nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015!