Just a quick reminder that there is still time to book for The Property Vault Medway. It’s being held on 28 February 2017 and our guest speaker on the night will be Ross Mallalieu from the Intelligent Property Academy. I hope to see you there.
Book tickets here for The Property Vault Medway
It’s a funny time of year, isn’t it? The seasons seem to flit between spring and winter. One day you’re wrapping up warm, while the next day the windows are flung open for fresh air. It is also that time of year when people start looking to move – promising times for us in the property business.
We had plenty of speculation last year that the economy would suffer, which included the housing market. However, estimates from the Office of National Statistics show that the economy has grown more than expected in the last three months of 2016.
Gross Domestic Product (GDP) has increased by 0.7% – up from 0.6% – which correlates to the manufacturing industry experiencing a good spell. Experts are also saying the upturn is as a result of more consumer spending.
Meanwhile, the housing market has also picked up. HRMC data shows an increase in the number of residential property transactions between December 2016 and January 2017. The seasonally adjusted figure for the month is 0.3% higher compared with the corresponding month last year.
This rise marks the fourth consecutive month of increases, and shows a pick-up from the 0.2% rise seen between November and December 2016.
The large growth in transactions for March 2016 followed by the substantial reduction in April is likely to be associated with the introduction of the higher rates on additional properties in April 2016.
However, while April and May 2016 show lower figures than the corresponding months in 2015, it should be noted that the total for Quarter 1 to Quarter 2 of 2016 is still substantially higher year-on-year.
The additional property rates that were announced in the Autumn Statement 2015 for England, alongside non-tax factors, may have played a role as well.
Take the Bank of England’s plans to curb buy-to-let mortgages as an example. The scheme resulted in a rush to purchase before April 2016. Or consider the EU Referendum affecting transactions in recent months. The residential count in the figures include properties paying the main and additional rates.
If we look more closely at Land Registry Data for Medway, we see it reflecting the national trend. The data has not yet been broken down after October, but it is almost certain to continue following the national figures.
The next chart shows the general performance of the housing market over the past 11 years. The clearest feature is the sharp fall in residential transactions at the end of 2007, coinciding with the housing market slump and credit crunch.
Prior to this point, the number of transactions had risen constantly over a number of years to reach a peak of around 150,000 per month. The seasonally adjusted transaction estimate shows a distinct peak at December 2009. This is associated with the end of the Stamp Duty Land Tax ‘holiday’, during which the lower tax threshold was temporarily raised to £175,000.
The forestalling effects of this ‘holiday’ coming to an end also show as higher than normal transactions in the previous few months as homebuyers brought forward their purchases. March 2016 recorded the highest number of transactions in the last 10 years.
All this shows that confidence in the housing market continues to grow. It is anticipated that the market will be affected by the political climate going forward – but overall it is clear that investing in bricks and mortar is still a viable venture in Medway and beyond.
Otherwise, if you wanted to chat about property investment in Medway or Gravesham, I’m happy to hear from you. Give me a call on 07944 726676 or email me at firstname.lastname@example.org.
And feel free to join the Property Investors in Medway Facebook Group, which is the place for landlords of Medway to swap tips and strategies with each other, as well as sharing networking opportunities.