LAST year was a good one for the property price market and buyers and sellers. Renting was also a good option, as tenants saw no or small rises in rents over the year, around £5 to £10 per month.
The latest data from the Land Registry shows prices continuing to recover to their 2007 heights, but it's going to take a while. We saw 4% to 6% house price rises from 2013 to 2014, which meant buyers had a good incentive and sellers could move on with a bit extra in their pockets.
However, most Derbyshire property prices are still 11% lower than 2007. But I have been looking at the "sold property price" data and am amazed at the huge difference in price changes when it comes to individual properties and areas – proving that averages can be misleading, even at a local level.
Looking at the last 25 flats sold in Derbyshire, seven sold for less than they were bought for, even ones which were bought as far back as 2003. And yet, six sold for more than they were bought for at the height of the market around 2007.
Researching detached homes, some are selling for more than they were in 2007, by around 5%, but most seem to be selling on a par, with the odd exception where work may have been done to add value. It's a similar picture for terraced homes.
Looking to 2015, it's a tough year to predict. Consumer confidence is very important as without it people aren't keen to buy. Good news about jobs and the economic growth will boost confidence, making people more likely to buy and sell, but on the other hand we have the election coming up and, depending on policies around "discounted homes" for first-time buyers or increased taxation which could affect buy-to-let investors, this could either encourage people to move before May or they may decide to wait until afterwards.
One issue which is likely to continue is a lack of stock. Because prices haven't increased that much, it's difficult for people to move up the ladder as they haven't gained any extra equity, so they will have to rely on savings as opposed to price growth to fund the next move. Another reason for fewer properties coming onto the market is because we are living longer and staying in our homes for much longer, too. Figures suggest the long-term average stay in a property is 15 years, which fell to around eight years in the late-1980s but is now up as high as 25 years.
On the finance front, with the Bank of England being given more power to restrict mortgage lending and the likelihood of an interest rate rise this year or early next, the cost of owning a home is likely to rise, so this could put people off buying and restrict what they can borrow.
And it's because of these major changes to our property market dynamics that, even though forecasters are predicting smaller rises of 2% to 3% for the East Midlands, what happens to property prices will be extremely individual. You can rely on your local estate agents and RICs surveyors to offer expert help when you need to know what a property is worth.
