Supply and Demand Issues mean Salisbury Property Values Rise by 4.41% in the Last 12 Months

The most recent set of data from the Land Registry has stated that property values in Salisbury and the surrounding area were 4.41% higher than 12 months ago and 16.40% higher than January 2015.

Despite the uncertainty over Brexit as Salisbury (and most of the UK’s) property values continue their medium and long-term upward trajectory. As economics is about supply and demand, the story behind the Salisbury property market can also be seen from those two sides of the story.

Looking at the supply issues of the Salisbury property market, putting aside the short-term dearth of property on the market, one of the main reasons of this sustained house price growth has been down to of the lack of building new homes.

The draconian planning laws, that over the last 70 years (starting with The Town and Country Planning Act 1947) has meant the amount of land built on in the UK today, only stands at 1.8% (no, that’s not a typo – its one point eight percent) and that is made up of 1.1% with residential property and 0.7% for commercial property. Now I am not advocating building modern ugly carbuncles and high-rise flats in the Cotswolds, nor blot the landscape with the building of massive out of place ugly 1,000 home housing estates around the beautiful countryside of such villages as Britford, Alderbury and Winterbourne Gunner.

The facts are, with the restrictions on building homes for people to live in, because of these 70-year-old restrictive planning regulations, homes that the youngsters of Salisbury badly need, aren’t being built. Adding fuel to that fire, there has been a large dose of nimby-ism and landowners deliberately sitting on land, which has kept land values high and from that keeps house prices high.

Looking at the demand side of the equation, one might have thought property values would drop because of Brexit and buyers uncertainty. However, certain commenters now believe property values might rise because of Brexit. Many people are risk adverse, especially with their hard-earned savings. The stock market is at an all-time high (ready to pop again?) and many people don’t trust the money markets. The thing about property is its tangible, bricks and mortar, you can touch it and you can easily understand it.

The Brits have historically put their faith in bricks and mortar, which they expect to rise in value, in numerical terms, at least. Nationally, the value of property has risen by 635.4% since 1984 whilst the stock market has risen by a very similar 593.1%. However, the stock market has had a roller coaster of a ride to get to those figures. For example, in the dot com bubble of the early 2000’s, the FTSE100 dropped 126.3% in two years and it dropped again by 44.6% in 9 months in 2007… the worst drop Salisbury saw in property values was just 18.18% in the 2008/9 credit crunch.

Despite the slowdown in the rate of annual property value growth in Salisbury to the current 4.41%, from the heady days of 11.62% annual increases seen in mid 2010, it can be argued the headline rate of Salisbury property price inflation is holding up well, especially with the squeeze on real incomes, new taxation rules for landlords and the slight ambiguity around Brexit. With mortgage rates at an all-time low and tumbling unemployment, all these factors are largely continuing to help support property values in Salisbury (and the UK).

Jubilee Close, Salisbury – £149,950

Priced to sell!

Yet another Jubilee Close flat for sale. This would make a cracking First Time Buy or fantastic BTL opportunity.

For sale with Express Estate Agency is two bedroom apartment within Carnival House, Jubilee Close. Whilst it may be situated a little way out of town, these flats offer extremely well proportioned accomodation for the money as well as offering off-road parking and a regular bus service into the City Centre. We sold a ground floor flat within the same development just last year for a figure of £154,000 which we then let for £725pcm. At £149,950, I would estimate that the rents would now be around £750pcm, bringing in a respectable yield of 6%.

http://www.rightmove.co.uk/property-for-sale/property-61167343.html

Salisbury’s New 3 Speed Property Market

“What’s happening to the Salisbury Property Market” is a question I am asked repeatedly.  Well, would it be a surprise to hear that my own research suggests that there isn’t just one big Salisbury property market – but many small micro-property markets?

According to recent data released by the Office of National Statistics (ONS), I have discovered that at least three of these micro-property markets have emerged over the last 20+ years in the city.

For ease, I have named them the …

  1. lower’ Salisbury Property Market.
  2. lower to middle’ Salisbury Property Market.
  3. ‘middle’ Salisbury Property Market.

The ‘lower’ and ‘lower to middle’ sectors of the Salisbury property market have been fuelled over the last few years by two sets of buyers. The first set, making up the clear majority of those buyers, are cash rich landlord investors who are throwing themselves into the Salisbury property market to take advantage of alluringly low prices and even lower interest rates. The other set of buyers in the ‘lower’ and ‘lower to middle’ Salisbury property market are the first-time buyers (FTB), although the FTB market is in a state of unparalleled deadlock as it’s been trampled into near-immobility and incapacity by the new 2014 stricter mortgage affordability regulations and also fewer mortgages with low deposits.

Some of you may be interested to know how I have classified the three sectors ..

  1. lower’ Salisbury housing market – the bottom 10% (in terms of value) of properties sold
  2. lower to middle’ Salisbury housing market – lower Quartile (or lowest 25% in terms of value) of properties sold
  3. middle’ Salisbury housing market – which is the median in terms of value

…. and if one looks at the figures for Wiltshire Council area you can see the three different sectors (lower, lower/middle and middle) have performed quite differently.

You can quite clearly see that it is the ‘lower to middle’ market that has performed the best.

You might ask, what do all these different figures mean to homeowners and landlords alike?  Quite a lot – so let me explain. The worst performing sector (with the lowest Percentage uplift) was the ‘lower’ housing market. Therefore, interestingly, if we applied the best percentage uplift figure (i.e. from the ‘lower to middle’ market percentage uplift), to the ‘lower’ 1995 housing market figure, the 2017 figure of £140,000, would have been £144,781 instead.

Now, I have specifically not mentioned the upper reaches of the Salisbury housing market for several reasons.  Firstly, the lower or middle market is where most of the buy to let investment landlords buy their property and where the majority of property transactions take place. Secondly, due to the unique and distinctive nature of Salisbury’s up-market property scene (because every property is different and they don’t tend to sell as often as the lower to middle market), it is much more difficult to calculate what changes have occurred to property prices in that part of the Salisbury property market – looking at the stats for the up-market Salisbury property market from Land Registry, only 24 properties in Salisbury (and a 5 mile radius around it) have sold for £1,500,000 or more since 1997.

So, what should every homeowner and buy to let landlord take from the information that there are many micro-property markets? Well, when you realise there isn’t just one Salisbury Property Market, but many Salisbury “micro-property markets”, you can spot trends and bag yourself some potential bargains. Even in this market, I have spotted a number of bargains over the last few months that I have shared in my Property Blog and to my landlord database, especially in the ‘lower’ and ‘lower/middle’ market.

Rampart Road, Salisbury – £190,000

A fantastic two bed situated on the Ring Road, the perfect starter home or BTL opportunity!

Currently advertised with Turtle Homes, this two bedroom property is ideally situated for those requiring direct access to the City Centre and Mainline Station. The accomodation is well presented throughout, comprising open plan Living Room, Kitchen/Diner, two good sized Bedrooms and family Bathroom along with well proportioned rear garden.

I would estimate a rental value of around £850pcm, meaning a potential yield of 5.3%! Give Turtle Homes a call to arrange your viewing! http://www.rightmove.co.uk/property-for-sale/property-59770405.html