Market Comment From Downer & Co
It’s now commonly agreed amongst economists and the general public that the dramatic rise in Newbury property prices of the last six years has tempered somewhat.
Read the National newspapers, and they talk of such things as strained buyer affordability (as property prices have increased over the past six years at a far faster pace than average salaries), a lack of new properties being built and the Brexit uncertainties over the last two and half years being blamed for the slow down – yet in the last 12 months, people have still been moving, buying and selling in Newbury at levels similar to the last six years – something tells me we have a case of ‘bad news selling newspapers’.
So instead, let me share with you what, exactly, is happening in the Newbury property market, and more specifically, who is moving and why in Newbury. In the last twelve months most of the property sales in Newbury involved flats which sold for on average £239,900. Terraced properties sold for an average price of £325,600, while detached properties fetched and average £533,600.
In Newbury, in the homeowner sector in 2018 (i.e. owner occupation), 303 households moved within the tenure (i.e. sold the home they owned and bought another one) and 59 new households were created (i.e. they moved from living with family/friends and bought their first home without privately renting).
What does this mean for Newbury buy to let landlords? Well looking at the graph, it appears bad news for landlords. There were 141 households that moved into the home owning (owner occupation) tenure from the private rented sector, whilst on the other side of the coin, 111 Newbury households moved to the private rented sector from owner occupation … which appears on the face of it, a reduction in the private sector. However my research suggests that a reduction in stock levels will mean an increase in rents.
I have one final thought and opportunity for you Newbury property investors and buyers. 73 owner occupied households in Newbury sold in last year where the homeowners had passed away. These properties can offer potential and great returns. The reason being is some members of the older generation who have owned these homes for decades have spent money on high capital items (double glazing / central heating etc.) but not spent money on more superficial low-ticket items such as up to date carpets, kitchen, bathroom and decorating (vital if you want to sell your property for top dollar). These properties can often be bought cheaply because most buyers can’t see past the avocado or brown bathroom suite from the 1970’s and the dated decor, so if you were to buy wisely and do the works, you rent it and still have immediate capital appreciation.
So, whatever is happening in the world with Brexit, Trump, China, and the Stock Market … the Newbury housing market is in decent shape for the medium to long term. If we do have small corrections in values in the next 12 to 18 months, in the long term, house prices have always returned … and returned with vengeance. Like I say to anyone buying a property, be they a first time buyer, landlord or homeowner … property is a long game … and if you play the long game, you will always win (although isn’t that true in most aspects of life?).
If you want to know more about property in West Berkshire, then one place for such information would be the Newbury Property Blog. Please visit www.newburypropertynews.co.uk view our pages on Facebook or pop into our office in Cheap Street in Newbury.
