At the end of year the East Midlands and Nottingham did really well with 8-10% average increases year on year versus long term averages of 7% increase. Prices though are not that much higher than 10 years ago – 8-10%.
The City of Nottingham is still suffering low performance, mainly due to oversupply of city centre flats which are selling well below their original price and just a 4% increase ‘on average’.
UK HPI sold data – October 16
Expectations are for lower property price growth this year – hardly changing in the East Midlands but what really happens remains to be seen though. Little growth is predicted over next five years mainly due to property prices now moving more in line with wages which they have been outperforming since the millennium.
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Anyone holding property with cash needs to be aware that their home may well not be keeping up with cost of living increases, which on average are around 3% each year.
Source: Knight Frank
What’s happening to Rents?
Rents are performing better and are expected to grow by around 12% or more over the coming years so tenants should get a property sooner rather than later. That’s true especially this year due to the increase in costs landlords are suffering.
Average rents in Nottingham
Source: Belvoir Lettings
With the NAEA predicting rents being around 10% higher by 2025 than they are now – in line with wage growth -affordability is not expected to worsen for tenants.
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Local market review
Mark Philpot from Robert Ellis reported an earlier slowdown for both buying and selling in December compared to the last few years. However, so far in January, there’s a good number of people thinking about selling with lots of viewings and sales being agreed. There are likely to be some price increases at the lower end of the market, and in particular the middle range, with people looking to move up the ladder. This sector has already seen increases over the last couple of years, mainly due to a lack of stock. At the higher end of the market there probably won’t be any real increases this year due to less demand for larger properties and more available stock.
Buy to let investors purchased few additional properties to let out after Spring last year and with tenants remaining in the same property for longer, this is causing a lack of stock meaning rents have already increased by around 10% having been flat as a pancake over recent years following large falls in 2009.
Overall, early signs indicate 2017 looks promising albeit it could be a tougher year than recent ones with buyers and sellers being unsure about wanting to move or not.
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