The ‘Liquorice Allsorts’ Nottingham Property market

Despite the UK economy heading in the right direction, with record low mortgage rates and unemployment  figures dropping,  the rate at which property prices are rising in Nottingham has tempered since the start of the year. This slow but sure downward trend in the rate of growth has been evident since mid-2014.  Property value increases continue to outpace the growth in salaries; however the gap is now closing, helped by a lift in salaries over the last 6 months.  Property values in the East Midlands region as a whole are 2.9% higher than a year ago.  Compare this to the neighbouring regions of the West Midlands at 3.5% higher and Yorkshire at 1.1%, the majority of the country continue to see annual house price gains - the exception being Wales which recorded a slight decline of -0.6%.

Even with the tempering in house price inflation, it does not necessarily change my outlook that property prices are likely to be firmer over the second half of 2015 amid heightening activity in the Nottingham property market.  As I’ve mentioned before, there is a current shortage of properties on the market, restricting supply, which in turn will provide stability and support to property prices. My overall opinion, therefore, is that Nottingham prices will rise by 5% over 2015 and roughly the same in 2016.

Property investment is a long term business, buying the right sort of property is vital. I have recently been speaking with a number of Nottingham landlords about the importance of a balanced portfolio, when buying and renting out property. The balance between buying properties that offer good monthly returns but quite often offer poor capital growth; versus properties that increase in value at a faster rate, but often offer a lower yield.  So, what type of properties have performed best over the last few years in Nottingham, especially in terms of their capital growth?

When comparing what the average price that detached, semi-detached, terraced and apartments were selling for back at the start of the Millennium to the present in Nottingham, the results are quite remarkably different. Almost like a bag of Liquorice Allsorts, as the different types of property have performed poles apart over the last 15 years:

• ·         Detached Houses were selling on average for £111,875 in 2000, but so far in 2015, they have been selling for approximately £237,579 showing a rise of 112%.
• ·         Semi-detached Houses were selling for an average of £58,940 in 2000, however in 2015 figures suggest that they have been selling for close to £144,791 with a rise of 146%.
• ·         Terraced Houses were selling on average for £43,784 in 2000, currently in 2015 they have been selling on average for £107,301 suggesting a rise of 145%.
• ·         Flats and Apartments were selling on average for £60,926 in 2000 however, at this present time they are selling on an average of £98,937 giving a rise of 62%.

Moving forwards, what should new and existing buy to let landlords do with this information?  Well, the questions I seem to be asked on an almost daily basis by landlords are:

·         “Should I sell my property in Nottingham?”

·         “Is the time right to purchase another buy to let property in Nottingham; and if not Nottingham, where?”

·         “Are there any property bargains out there to be had in Nottingham?”

Many landlords like to pop in for a coffee, pick up the phone or email me to discuss the local property market, how it compares with its closest rivals (Derby, Leicester and Birmingham) and hopefully answer the three questions above. I don’t bite, I don’t do hard sell and I will just give you my honest and straight talking opinion and look forward to hearing from you.