Sheffield Property Values 2.7% higher than year ago
Sheffield property values fell by 0.5% last month, meaning they are 2.7% higher than 12 months ago. Even though values dropped slightly, overall, I expect future property price growth to remain firm, built on the foundations of an improving labour market, strengthening economy and very low mortgage rates. In fact, talking to a number of other agents in the city, mortgage arrangers and solicitors (all of whom have their direct finger on the pulse of the Sheffield property market), the steady long term growth in Sheffield property prices tied in by strong demand conditions so far this summer, alongside an underlying lack of supply and the continued low mortgage rate environment, means the slow but steady upward momentum of the Sheffield property market is likely to continue in the second half of 2015.
However, there are a couple points I wish to highlight as all my blog readers will know, I like to give a balanced and honest opinion of what is happening in the Sheffield property market. Â The two main points being low interest rates and a lack of supply of property.
Interest rates first – Mark Carney (Chief of the Bank of England) said in a speech a few weeks ago at Lincoln Cathedral, the Bank will be seriously considering raising interest rates around Christmas time. An upward movement in interest rates will temper demand and result in a marked slowdown in house price growth. Mr Carney said that only six out of ten people that had a mortgage (57% to exact) had a variable rate mortgage, compared with more than seven out of ten peopleÂ (73% to be exact) in the Summer ofÂ 2012. Now I am not a mortgage arranger and cannot give advice, but rates are only going on one direction, so whether you are a landlord or homeowner, this might be a time to consider fixing your mortgage rate?Â Donâ€™t say I didnâ€™t warn you!
Tie this in with the stricter mortgage lending rules which were introduced in 2014, which affected peopleâ€™s ability to have larger mortgages, this means homeowners will need to be realistic in their pricing if they want to sell. Reading other recent reports though, property owners have continued to pay off mortgages at a faster rate while mortgage rates have been low. Therefore, when mortgage rates rise, the affect on home movers sentiment which, given the shortage of supply, would result in a marked slowdown in the rate of house price growth.
Shortage of Supply â€“ As I have mentioned in previous articles, the number of houses on the market in Sheffield is at an all time low. One reason is the large number of buy to let landlords who have bought Sheffield property over the past fifteen years. Unlike first time buyers who tend to move on after a few years, landlords tend to keep their properties long term, meaning there are less properties coming onto the market … thus restricting supply and sales. In fact over the last four months, only 1,731 properties in the Sheffield City Council area have changed hands and sold, compared to 2,103 in the same time frame in 2014, a not so insignificant drop of 17.69%.Â
If you are planning on investing in the Sheffield property market, or just want to know more, things to consider for a successful buy to let investment, one source of information is the Sheffield Property BlogÂ www.sheffieldpropertyblog.com