Many landlords have been asking me my thoughts on the Lancaster property market recently, and in particular, what is happening to property values. My calculations show property values in Lancaster quite interestingly grew in the month of September by 0.6%. When one looks at the annual growth, Lancaster values are 1.4% higher (when comparing Sept 14 to Sept 15). However, there are signs that the fundamental growth of property values in Lancaster is now possibly peaking.
Even though prices are higher this month, this rise of Lancaster property values masks the underlying truth in what is really happening to local property values in the City. Throughout 2015, property values have been yo-yo like on a month by month basis, being quite volatile in nature. For example,
September 2015 0.6% drop
August 2015 0.3% rise
July 2015 0.6% rise
June 2015 0.7% rise
May 2015 1.0% rise
April 2015 0.7% rise
March 2015 0.7% drop
This is in part due to seasonal factors, as well as mortgage approvals increasing over June and July and then falling by over 15% in August, according to the Council of Mortgage Lenders (CML).
The outlook for the Lancaster property market remains positive against the foundations of low mortgage rates and growing consumer confidence. However, I do have to question the recent CML mortgage data and whether that raises issues over whether the rate of growth since the Tory’s were re-elected in the early summer can continue?
However, on a positive note, Lancaster property values are still running ahead of salaries and average property values are 10.09% above the levels recorded in 2007 property peak. Although, in some (but certainly not all) parts of Morecambe property prices have still a long way to recover to the 2007 levels, with for example, terraced houses in the Branscombe Estate being 27.3% below the 2007 level. This is even more amazing when you consider as a whole, the county average, according to the Land Registry, is that property prices today are 20.5% below the 2007 peak!
Talking to fellow property professionals in the City, demand for property has been showing signs of moderating in the final few months of 2015, which in turn will lead to a slight slowdown in the pace of house price growth in the run up to the festive season. You see, it is really important not to read too much into one month’s (September’s) headline figures.
Readers might be interested to note that before the 2008 property crash, all the UK region’s housing markets tended to move up and down in tandem like the Lancaster Synchronised Swimming team at the Lancaster University Swimming Pool! Since then though, the Greater London property market took off like a rocket in 2009/10, whilst the rest of the UK only really started to grow in 2012/13, and even then that growth was a lot more modest than the Capital’s. Looking closer to home, it can even be different in neighbouring towns, areas and cities, so whilst Lancaster property values are 2.4% higher than a year ago (as mentioned above), Blackpool property values are 2.6% lower than a year ago.
I cannot stress enough the importance of doing your homework. We make regular posts here on the Lancaster Property Blog, so please register for our weekly updates. Alternatively you can call me at our Lancaster office on 01524 843322. We’ll let you know whats really happening in the local property market and who’s got the best buy to let properties for sale.
Thanks for reading