Welcome to the first in what will be a regular feature, local property columns by expert Christopher Watkin.
Property values in Grantham rose by only 0.2 per cent in March. This follows several months of sluggish activity in the Grantham property market in the run up to the election, putting the average price of a property in Grantham at £176,400, 3.8 per cent higher than in March 2014.
Interestingly, the Council of Mortgage Lenders and Estate Agent trade bodies over the last few months have reported seeing a fall in mortgage lending and enquiries from prospective homebuyers. This is important because it comes amid an overall fall in housing market activity in Grantham. Data from the Land Registry said completed house sales in Grantham in the three months to January 2015, (the most up-to-date figures available) fell by 13.22 per cent compared to the same three-month period up to January 2014.
However, I believe that the slowdown in property sales in Grantham is supporting Grantham property values, as there is a shortage of houses coming onto the market. Even though in the whole of the first quarter of 2015, Grantham property value increases may seem subdued when compared to 2014, let us remember, property values are still rising well above the level of inflation.
As I have said many times before, the population in Grantham is growing at a much higher rate than the number of properties being built. This increasing demand for a roof over people’s head, which is outpacing the supply of new houses being built in Grantham, is creating a severe imbalance in the Grantham (in fact the whole of UK’s) housing market, thus making homeownership an ever increasingly distant dream for many of Grantham’s potential first time buyers.
In fact, I still maintain the view that house prices are likely to rise by around 3 to 5 per cent in Grantham in 2015, even after taking into account this blip at start of the year. The reason being is that the rise reflects both strong economic conditions and steady market conditions with (and this is the most important factor) very low numbers of properties on the market.
Many ‘buy to let’ landlords know that investing in the Grantham property market is a long-term strategy of 10, 20 even 30 years. Governments come and go, but unless South Kesteven District Council start to build hundreds of new properties a year to make up for the shocking lack of supply, Grantham people will always want a roof over their head, and irrespective of which party is in power, if there aren’t any council houses and they can’t (or are unable to buy), a demand for rental properties will always remain.